After three unsuccessful bids to sell advertising space on buses, the HCM City Department of Transport aims to invite a fourth tender this month. (Photo: VNA) HCM City (VNS/VNA) -The three unsold packages for leasing advertising space on Ho Chi Minh City’spublic buses will be put up for auction for a fourth time this month followingthree earlier unsuccessful attempts, according to the municipal Department ofTransport.
On September 12 last year, the department calledfor three-year bids for advertising on 2,082 buses.
Package 1 for 492 buses on 25 routes had areserve price of 161 billion VND (7.1 million USD), package 2 for 538 buses on23 routes cost 193 billion VND, package 3 for 527 buses on 26 routes cost 171billion VND, and package 4 for 525 buses on 30 routes cost 167 billion VND.
Japanese ad agency Koa Sha Media Vietnam was theonly company to bid, and it won the first package.
The remaining ones failed to attract interest,with advertisers calling them too expensive after a second unfruitful attempt.
The department then divided them into eightsmaller packages and called for a third bid on July 18 this year.
The prices this time ranged from 10.5 billionVND to 36 billion VND per year before tax, but it was a familiar tale of lackof interest.
Tran Quang Lam, deputy director of thedepartment, to explain the lack of interest, said online advertising is now thetrend rather than advertising on buses or at bus stations.
Besides, the auctions were for three years,which made them even less attractive, he said.
After the third auction the department assignedthe Public Passenger Transport Management and Operation Centre to divide thepackages into smaller ones and reduce the contract period to one or two years.
Lam said: “The fourth auction will be held thisDecember. If it does not work either, the department will propose to the cityPeople’s Committee to hire a consultancy to re-evaluate the bid prices.”
While concurring with Lam on the decreasingdemand for outdoor advertising, Nguyen Quy Cap, head of the HCM CityAdvertising Association, said the high reserve prices and improper division ofthe packages were the main reasons for firms not showing interest.
He said advertisers just want to advertiseoutdoor for several weeks or a few months at a time as their products keepchanging.
“Although demand for outdoor advertising isdeclining, there is still demand. Advertising firms now tend to put ads on taxidue to the large number of vehicles, reasonable prices, and the ease ofsecuring contracts.”
Besides, Hanoi is an attractive market for adson buses, with prices only a fifth of HCM City’s, according to Cap.
The first package won by the Japanese firmcomprises all the best routes while the remaining are like leftovers.
“These [remaining] packages are not good and atthe same time expensive. So the lack of interest leading to the unsuccessfulauction was obvious.
“If the bids are not changed, the packages cannotbe sold regardless of how much smaller they are divided into.”
The reserve prices should be slashed by 50 percentand ad companies should be allowed to sign a contract for bus advertisingaccording to their capacity instead of buying the whole package, he said.
Le Trung Tinh, Chairman of the HCM CityInterprovincial and Tourist Passenger Transport Association, said thedepartment should conduct a survey to assess the real demand from advertisingfirms and offer prices based on supply and demand.
If demand is low, prices should be reduced asmuch as possible to attract bids, which would be better than having no biddersat all, he added.
Leasing advertising space on buses could fetchthe city around 200 billion VND a year, which would help reduce bus subsidies.-VNS/VNA
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